GRAND RAPIDS — Backed by a recent $2 million capital raise, a startup Grand Rapids-based digital health company plans to expand its sales force and further develop its software that allows patients to receive virtual care at home.
The latest investment came as RespondWell LLC, based out of Start Garden LLC’s downtown offices, seeks to close another $8 million fundraising round to support the company’s development.
“It will take us to scale,” RespondWell co-founder, Chairman and CEO Ted Spooner said of the capital raise that included investments from Start Garden and Michigan Accelerator Fund I in Grand Rapids.
Playing in the rapidly emerging and growing field of telehealth, RespondWell will focus initially on a platform and software that provides physical therapy sessions to patients in their homes, whether online or via a smartphone application, alleviating the need for them to go to an outpatient clinic.
Deploying an approach used in video games, the company’s platform takes patients through their physical therapy, led by a digital instructor, at their convenience. The platform then delivers video and data from the session to a therapist, who monitors patients’ progress virtually. Patients can also report any issues or concerns they have.
“We essentially provide the ability to have an eye on you while you’re at home,” said Spooner, who previously developed fitness games for the Xbox and Wii platforms and moved to Grand Rapids from Oregon two years ago.
“It has a lot of potential and we’re really pushing hard to grow the business,” he said.
Clinical testing on telerehabilitation provided some validation for the service.
The study involved 51 patients who underwent knee-replacement surgery and were provided physical therapy either at an outpatient clinic or through a platform using what’s scientifically known as “asynchronous video.”
Among the 29 patients who completed the study, “there were no statistically significant differences in any clinical outcome between groups” who went through physical therapy using the platform and who received treatment in an outpatient setting, according to results recently published by the National Center for Biotechnology Information.
Patients treated virtually used 60 percent less hospital-based resources, and the satisfaction rate between the two groups was equivalent, according to the study.
“We report that clinical outcomes following asynchronous telerehabilitation administered over the web and through a hand-held device were not inferior to those achieved with traditional care,” the authors of the study wrote.
“The results suggest that asynchronous telerehabilitation may be a more practical alternative to real-time video visits and are clinically equivalent to the in-person care model.”
RespondWell worked on its telerehab platform with West Michigan physical therapy provider I’move Daily in Spring Lake, Grand Rapids Orthopedics, and Muir Orthopedic Specialists in Walnut Creek, Calif.
RespondWell intends to sell the service directly to physical therapy practices, Spooner said. In orthopedics alone, RespondWell’s platform has a market potential of eventually generating $50 million in revenue annually, and that’s a “conservative” estimate, he said.
The company also plans to develop the platform for other medical uses. RespondWell, for instance, is working with Mary Free Bed Rehabilitation Hospital in Grand Rapids on a version to provide therapy for patients recovering from a stroke.
Earlier this month, Dutch-based Royal Philips announced a partnership between RespondWell and its new Aging Well Services unit to deliver virtual services for senior citizens recovering from surgeries such as knee replacement or injuries suffered in a fall.
Michigan Accelerator Fund I first learned of RespondWell more than a year ago at a pitch event hosted by the Cleveland Clinic, said co-Managing Director Dale Grogan. As the venture capital fund heard more about RespondWell, it decided to make an investment because the company was led by a seasoned management team and offered a promising technology that’s starting to change how health care is delivered, he said.
“We thought, ‘Wow. This is cool,’” Grogan said.
RespondWell also is well into its product development process with “finished goods” moving toward the marketplace, Grogan added. The other selling point: The platform has broader applications in the telehealth marketplace.
“This market — telehealth — is just going to be exploding,” Grogan said. “We’re literally at the beginning of the movement and we know the market gets bigger and bigger as America gets older.”
‘OPENING UP ACCESS’
Telehealth, a term that includes both clinical and non-clinical services, and telemedicine technologies are quickly catching on in health care as a convenient, less-costly way to provide care. Many health care providers use some form of the technology for consultations, whether between physicians and clinicians, or for physicians and patients.
Tractica LLC, a Boulder, Colo.-based research firm, projects that telehealth video consultations in the U.S. will grow rapidly to 158.4 million by 2020, up from 19.7 million in 2014.
Spectrum Health late last year launched MedNow to allow users to access a primary care physician for minor conditions through an online video conference. The virtual visit costs $45, an amount covered by the Spectrum-owned insurance provider Priority Health. MedNow also remotely monitors patients with chronic medical conditions such as congestive heart failure and virtually extends medical specialties into rural areas.
“We are opening up access,” Joe Brennan, director of operations for MedNow, recently told a legislative committee in Lansing that’s considering legislation on telemedicine in Michigan. “We’re enhancing the patient experience because we’re bringing the care to them. Traditionally, we ask everyone to come to us, but instead we’re bringing the care to them.”
The nation’s largest provider of virtual visits with primary care physicians, Dallas-based Teladoc Inc., recorded more than 576,000 virtual patient visits with primary care physicians in 2015, a 93-percent increase from 2014. A representative for Teladoc told lawmakers at the February hearing that 146 employers in Michigan — including Herman Miller Inc., Dow Chemical, Domino’s Pizza, the W.K. Kellogg Foundation, Butterball Farms and ServiceMaster of Kalamazoo — contract with the company to offer employees access to primary care doctors for a flat fee of $40 to $45 per session.
The increasing demand from consumers to access care providers in a way that’s more convenient for them and on their terms is driving the growth in telehealth. Additionally, the technology and connectivity of today and the advancement in electronic medical records allows care providers to access and share patient data.
With the popularity of high-deductible health plans, consumers are paying more out of pocket for their care and that’s pushing many of them to look for alternatives to traditional care options, including telehealth.
“We are making much more informed decisions and are much more driven by our needs,” Spooner said. “It’s our convenience-driven lifestyle.”
Editor's Note: This story has been updated from a previous version to indicate that RespondWell was not a participant in the clinical study on telerehabilitation.